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Naughty?Well, OK, we can't exactly call these stocks naughty. But none of them gets much love from our 77,000-person-strong Motley Fool CAPS community of amateur and professional stock pickers.

To the contrary -- when it comes to these stocks, CAPS investors have gone thumbs-down more often than film critic Roger Ebert. They don't believe any of these stocks are worth owning, and they think some may be worth shorting.

Which of today's candidates is worst? Read on, dear Fool.

Worse
We begin with Cowen & Co. parent Cowen Group, which on Monday after market close announced that it was increasing its ratio of compensation to revenue, yet facing operating losses. Here are the relevant excerpts, beginning with a statement from CEO Kim Fennebresque: "The decision to increase the firm's compensation to 65% for 2007 was very difficult because of the obvious consequences for our bottom line and to our shareholders." [Emphasis added.]

What consequences? Next paragraph, please: "Based on current internal estimates, including the increased compensation ratio, Cowen management estimates a full year 2007 net operating loss of between $6.0 million and $8.3 million." [Emphasis added.]

Capital IQ reports that Cowen had booked a $2.8 million operating loss through the first nine months of 2007. Thanks in part to the raise, that total will now at least double and could triple. Nice going, guys.

WorserNext up is Washington Mutual, which, like peers Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C), is facing steep writedowns in its ailing mortgage business.

Trouble is, the cure seems no better than the disease. WaMu plans to go to the capital markets for $2.5 billion via preferred stock that would heavily dilute the interests of existing investors. Cost cuts, meanwhile, are expected to put at least 3,000 employees out of work.

Bad? Yes. But not enough to warrant a spot on today's list. For that, I refer you to the third paragraph of WaMu's press release. Quoting: "In addition, the company said its Board of Directors intends to reduce the quarterly dividend rate to $0.15 per share from its most recent quarterly dividend rate of $0.56 per share."

Ouch. Just as a rising dividend signals business strength, a cut signals weakness. A 73% cut, as we have here, signals ... Well, honestly, I don't know. Impending doom, perhaps? Unlikely, but whatever it is, I suppose to investors it feels like the atomic wedgie you got in seventh-grade gym class. Ah, memories.

WorstBut our winner, once again, is builder WCI Communities, which is seeking grace from its creditors in order to keep the doors open. Quoting from its press release: "WCI Communities ... today reported that the limited waiver of performance that was previously granted by its banks has now been extended to January 7, 2008. ... During the extended waiver timeframe, we expect to finalize discussions regarding the anticipated longer-term amendment that would provide financial flexibility." [Emphasis added.]

Now, here's why you should cringe: "This amendment will be expensive and there can be no assurance that we will [be] able to comply with the amended covenants and other requirements. If WCI is unable to obtain the amendment or comply with its terms, the lenders would have the right to exercise remedies specified in the loan agreements, including foreclosing on certain collateral and accelerating the maturity of the loans, which could result in the acceleration of substantially all of our other outstanding indebtedness." [Emphasis added.]

Is it me, or does it sound as though WCI is no more than a missed payment or two away from bankruptcy? Maybe that's not how it looked last month, when director Philip Handy was buying shares. But a lot can change in three or four weeks, and yesterday, board member Hilliard Eure, a former accountant, liquidated his entire direct stake in WCI.

Nuff said.

The credit beggars at WCI ... Tuesday's worst stock in the CAPS world.

Do you agree? Disagree? Let us know what you think by signing up for CAPS today. It's 100% free to participate.

I'll be back tomorrow with more stock horror stories.

Fool contributor Tim Beyers, who is ranked 8,772 out of more than 77,000 CAPS participants, hopes that Keith Olbermann doesn't mind the blatant theft of his "Worst Person in the World" segment from Countdown. Remember, Keith, imitation is the sincerest form of flattery.

Tim didn't own shares in any of the companies mentioned in this article at the time of publication. Find Tim's portfolio here and his latest blog commentary here. Washington Mutual is an Income Investor selection. The Motley Fool's disclosure policy thinks that cooked spinach is the worst veggie in the world.

Author

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At Fool.com, he covers disruptive ideas in technology and entertainment. Find him online at timbeyers.me or send email to tbeyers@foolcontractors.com. For more insights, follow Tim on Twitter.